Intel To Develop Its Own Graphics Chips Led By Former AMD Exec

In a surprise turn of events in a chip market that has been filled with surprises of late, Intel announced on Wednesday that it was starting an effort to sell high-end graphics cards and had hired the former head of graphics from Advanced Micro Devices.

Raja Koduri, considered one of the stars in the field, stepped down at AMD this week after a short leave of absence. After a long career at AMD and a four-year stint at Apple, he had returned to the company in 2013 to lead an effort to revive AMD’s graphics business. At Apple (AAPL), Koduri helped develop retina screen displays for the iPhone and other products. Before that he was one of the top graphics developers at AMD and ATI Technologies, which AMD acquired in 2006.

At Intel, Koduri will be senior vice president and chief architect at a newly formed unit called the Core and Visual Computing group. Intel (INTC) said it intends to expand into “high-end discrete graphics,” the industry’s term for high performing graphics cards used by video gamers and, increasingly, for artificial intelligence and machine learning.

“We have exciting plans to aggressively expand our computing and graphics capabilities,” Murthy Renduchintala, Intel’s chief engineering officer and group president responsible for PC market chips, said in a statement.

Still, it could take years for the new effort to bear fruit. The main new product Koduri worked on at AMD, the Vega graphics processor, just came out this summer.

AMD sounded like it might sue. “We have a very strong graphics team and will continue our focus on building great products,” a spokesman said. “We also have industry-leading graphics IP and, if necessary, will vigorously defend it.”

The Vega GPU has been a bit of a disappointment, with high energy usage and performance that didn’t soundly beat the best offerings on the market from Nvidia. Koduri first took a leave of absence in September, citing stress and reconnecting with his family. In email this week announcing that he would not return to AMD, Koduri wrote he wanted to move on to new challenges. “As I think about how computing will evolve, I feel more and more that I want to pursue my passion beyond hardware and explore driving broader solutions,” he wrote.

Intel sells by far the most CPU microprocessors to run personal computers, laptops and servers, but it has not been a major player in the graphics chip market, which is dominated by Nvidia (NVDA) and AMD.

The semiconductor market has been rocked by several surprises recently. Intel’s decision to hire Koduri and compete in graphics chips follows Broadcom’s (AVGO) unsolicited bid to buy Qualcomm (QCOM) for $130 billion including debt. And AMD (AMD) this week announced deal to sell graphics chips to Intel for use in chip sets for high-performance laptops.